ICU Medical Partners With Medline Industries to Acquire Excelsior Medical Corporation, $59.5M Deal

ICU Medical, Inc.,

, a leader in the development, manufacture and sale of innovative medical devices used in infusion therapy, oncology and critical care applications, today announced signing of a definitive agreement to acquire Excelsior Medical Corporation, a manufacturer of healthcare devices used to disinfect and protect access into a patient's bloodstream. Excelsior has developed and commercialized the innovative SwabCap® and SwabFlush® products and is a leader in pre-filled saline and heparin flush syringes. Excelsior is owned by RoundTable Healthcare Partners, an operating-oriented private equity firm focused exclusively on the healthcare industry. ICU Medical's purchase price for Excelsior is $59.5 million. ICU also signed a definitive agreement to sell the operating assets of SwabFlush and the pre-filled saline and heparin flush syringes to Medline Industries, Inc. for $27 million. The transaction with Medline will close immediately following the acquisition by ICU Medical of Excelsior. Both transactions are expected to close within a week. ICU Medical will serve Medline on an OEM basis as a supplier and innovation partner for Medline's SwabFlush business with a long-term exclusive supply contract. SwabCap is a disposable cap designed to disinfect needlefree connectors with 70% isopropyl alcohol when attached to an intravenous (IV) catheter. The SwabCap product line complements the ICU Medical Clave® family of needlefree connectors, as both work together to deliver the critical elements of safety, protection and maintenance of IV catheters. As the only device that combines a pre-filled saline flush syringe and disinfection cap, SwabFlush is designed to help improve compliance with disinfection protocols. SwabCap is built into the syringe plunger, making it immediately and conveniently available to nurses after they flush an IV line. Both SwabCap and SwabFlush have been the subject of numerous award-winning scientific presentations by independent clinicians at recent annual meetings of the Association for Vascular Access (AVA), Association for Professionals in Infection Control and Epidemiology (APIC), and the Children's Hospital Association. The addition of SwabCap will enhance ICU Medical's infusion therapy product offering across the company's existing direct and OEM business lines as well as open new customer opportunities globally. ICU Medical will sell the SwabCap product line directly to customers via its existing domestic and international distribution channels. "ICU Medical has always been deeply focused on safety for both the patient and the clinician in the infusion therapy category. The SwabCap used in conjunction with the Clave, offers a best in class solution for clinicians," said Alison Burcar, Vice President and General Manager of ICU Medical's Infusion Systems Division. "We have been studying the category for a long time and believe this acquisition is the most effective way to enter the market, where we can also leverage current and future innovations." "Our ability to work creatively with ICU Medical is a great outcome for all parties," said Dante Tisci, Division President of Medline Industries' Dynacor Division. "We believe we can improve overall economic and clinical value of the flush syringe market with our entry, and we are excited about growing a clinically differentiated product like SwabFlush. We are pleased to have a long-term supply agreement with ICU Medical for the SwabCap® component of this product." The transaction will be funded with cash on hand and is expected to be neutral to earnings in 2015. For 2016, the transaction is expected to add incremental revenue of $18 to $20 million and contribute minimal earnings per share (EPS) accretion. After one year the transaction is expected to provide a greater than 10% return on invested capital (ROIC).